Shell speeds up carbon reduction plans after Dutch court ruling

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Royal Dutch Shell PLC (LON:RDSB) has said it will speed up its transition away from fossil fuels after a landmark court case in the Netherlands last month.

Ben van Beurden, chief executive, said that doing so would see the business shrink considerably and it could yet win the case on appeal, but added Shell was prepared to take “bold but measured steps” over the coming years.

Ina case brought by seven activist groups, Shell was ordered to amend its plans to reduce its fossil fuel emission to comply with the Paris Climate Agreement.

To do that, it would have to reduce its carbon emissions by 45% by 2030 from 2019 levels.

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The Anglo-Dutch giant had proposed its own plan that would have seen a 20% reduction by 2030, by 45% by 2035 and 100% by 2050 from 2016 levels, but this was rejected by the court.

“For Shell, this ruling does not mean a change, but rather an acceleration of our strategy,” van Beurden said.

“Now we will seek ways to reduce emissions even further in a way that remains purposeful and profitable.”

Shell was also ordered to cut absolute emissions, rather than upping its pending on renewables and carbon offset measures, something that van Beurden has criticised.

“Imagine Shell decided to stop selling petrol and diesel today. This would certainly cut Shell’s carbon emissions. But it would not help the world one bit. Demand for fuel would not change. People would fill up their cars and delivery trucks at other service stations,” van Beurden said.

“A court ordering one energy company to reduce its emissions – and the emissions of its customers – is not the answer,” he added.

Analysts have said the ruling could lead to a 12% decline in the company’s energy output, including a sharp drop in oil and gas sales.

Shell is one of a number of energy companies in the crosshairs of climate activists.

US giant Exxon has seen three directors replaced by nominees of activist group Engine One, with BP, Chevron and Total also under pressure.

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